Monti calls for unity during 'most difficult days since WW2'

ITALY:ITALIAN PRIME minister Mario Monti yesterday called for a spirit of national cohesion to steer Italy through what he described as “the most difficult days in Europe since the second World War”.

Presenting his government programme in the Italian senate, Mr Monti, who was sworn into office on Wednesday night, touched on all the key issues likely to be confronted by his cabinet of technocrats, academics, business professionals, diplomats and senior civil servants.

At the end of a day-long debate, the new government late last night won its first vote of confidence, thanks to the votes of the two biggest parties in parliament – the ex-government PDL and opposition PD.

Mr Monti today presents his programme to the Italian lower house before another vote of confidence, which he is expected to win comfortably.

Pension reform, tax reform, labour-market flexibility, the fight against organised crime, a reduction in the cost of national and local government, and a new property tax will feature in a government programme based on “three pillars – balanced budgets, growth and equity”.

Admitting that he would not find himself in government today were it not for “this very difficult moment”, Mr Monti acknowledged the magnitude of the task in front of him. In particular, he appealed to the parties to seize the opportunity to put years of bitter left/right dialectic behind them to create the conditions that will “revamp Italy” and “re-establish confidence in our institutions”.

Lest he needed reminding of those difficulties, a timely signal came from his predecessor, Silvio Berlusconi, who at a meeting with his PDL party senators yesterday said that, while he had every respect for Mr Monti, his party would be opposed to a budget that would depress the economy.

Mr Berlusconi said the Monti government represented “a suspension of democracy”, adding that his PDL party would take to the streets to explain to Italians that his centre-right coalition, “which has always had a majority in the country”, was entitled to govern.

Mr Berlusconi’s words underline the biggest uncertainty facing the newly formed, non-party political government, namely the level of parliamentary support it can expect when it introduces unpopular austerity measures.

In that regard, Mr Berlusconi was hardly reassuring yesterday when he said not only that he would evaluate the Monti programme “one measure at a time”, but also that the PDL would oppose any form of wealth tax.

Mr Monti made no mention of a wealth tax in his speech yesterday, but this is clearly one of the options open to his executive when it considers tax reform.

Speaking in the senate yesterday, Mr Monti argued that the collapse of the euro would mean the collapse of the entire EU project. He highlighted Italy’s historic role as an EU founder member and said the future of the euro would depend on what Italy does in the next few weeks to guarantee the conditions of a “balanced budget, growth and equity”.